Information and Communication Technologies in a Multi-Sector Endogenous Growth Model

CERGE-EI Working Paper No. 386

61 Pages Posted: 24 Jun 2009

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2009

Abstract

This paper investigates the growth impact of Information and Communication Technologies (ICT) in an economy consisting of three sectors: ICT-producing, ICT-using, and non-ICT-using. The ICT progress causes falling prices of the consumption and intermediates produced by the ICT-using sector, providing incentives for investment in the sectors using them. Therefore, the non-ICT-using sector benefits indirectly from ICT, while households utility increases. The magnitude of the growth transmission mechanism relies on the ICT-using sector production shares. Aggregate economy is on a constant growth path, where growth rates differ across sectors. The model predictions are broadly consistent with the U.S. growth experience.

Keywords: multi-sector economy, endoegnous growth, constant growth path, information and communication technologies

JEL Classification: O40, O41

Suggested Citation

Vourvachaki, Evangelia, Information and Communication Technologies in a Multi-Sector Endogenous Growth Model (May 1, 2009). CERGE-EI Working Paper No. 386, Available at SSRN: https://ssrn.com/abstract=1424405 or http://dx.doi.org/10.2139/ssrn.1424405

Evangelia Vourvachaki (Contact Author)

CERGE-EI ( email )

Politickych veznu 7
Prague, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

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